Benjamin Gilbert & Anor Broadoak Private Finance Ltd (Costs)

Under Civil Procedure Rules 1998, r 44.2(a), the successful party to an interlocutory application should ordinarily receive its costs. Success is assessed by examining the practical outcome of the application, not merely by comparing each item of relief sought with the order made. Where an application secures necessary case-management directions which the opposing party would not otherwise have provided, the applicant may be the successful party even if some relief, such as a debarring order, is refused. Costs must then be assessed proportionately, having regard to the nature and length of the application, reasonable hourly rates, the work reasonably required and the absence of unnecessary duplication.

The claimants issued a Directions Application concerning the timing of the defendant’s Defence and evidence before the defendant’s application to set aside default judgment. They sought directions, debarring orders, permission for responsive evidence and their costs.

HHJ Pelling KC ordered the defendant to file further evidence, including any draft Defence, by a specified deadline, permitted responsive evidence by the claimants, and reserved costs. The parties each claimed to have succeeded. The issue was which party had succeeded on the Directions Application and what sum should be awarded following summary assessment.

1. Success on the Directions Application. The claimants were the successful party for the purposes of CPR 44.2(a). The material practical result was that a draft Defence had to be served well before the set-aside hearing, enabling the claimants to consider it and respond. That result was obtained only through the Directions Application.
2. The claimants’ failure to obtain a debarring order did not displace that conclusion. Their Calderbank offers were not tantamount to debarring orders, and the defendant’s position that it could serve a Defence only shortly before the hearing was unreasonable. The additional permission for reply evidence did not materially assist the defendant because such permission would have been required in any event.
3. The costs were to be assessed on the standard basis and summarily. The sums claimed were excessive for a straightforward application listed for 45 minutes. The recoverable hourly rates were reduced to £398 for Grade A and £260 for Grade C, based on London 2 rates. Unnecessary partner time and excessive work were disallowed. Counsel’s fees beyond the appropriate brief fee, and the costs of two Counsel for the paper assessment, were not justified.
4. The defendant was ordered to pay the claimants £21,000 inclusive of VAT, by 22 August 2024, as the costs of and occasioned by the Directions Application.